PUBLICATIONS
Female Entrepreneurship, Financial Frictions and Capital Misallocation in the US
(joint with Andrea Sy) @ Journal of Monetary Economics
We document and quantify the effect of gender gaps in access to credit on both entrepreneurship and the misallocation of productive inputs in the US. Female-owned firms are more likely to be rejected when applying for a bank loan and have a higher average product of capital, which is a sign of capital misallocation across producers. We develop a heterogeneous agents model of entrepreneurial choice under financial frictions where female entrepreneurs can be subject to a tighter borrowing constraint that limits their entrepreneurial participation and distorts their optimal capital choices. Our quantified framework can explain the bulk of the gender heterogeneity in capital allocation across firms and a third of the disparities in entrepreneurial rates. Parallel to that, eliminating the gender difference in financial access has a sizeable positive effect on the allocation of entrepreneurial talent and capital, and leads to a 4% increase in total output. Finally, we explore the differential effect that fiscal policies targeting entrepreneurial activities can have on both male and female-led firms in the presence of gender imbalances in financial markets.
Winner of the Young Economist Award from the European Economic Association and UniCredit Foundation in 2021
Female Entrepreneurship, Financial Frictions and Capital Misallocation in the US
(joint with Andrea Sy) @ Journal of Monetary Economics
We document and quantify the effect of gender gaps in access to credit on both entrepreneurship and the misallocation of productive inputs in the US. Female-owned firms are more likely to be rejected when applying for a bank loan and have a higher average product of capital, which is a sign of capital misallocation across producers. We develop a heterogeneous agents model of entrepreneurial choice under financial frictions where female entrepreneurs can be subject to a tighter borrowing constraint that limits their entrepreneurial participation and distorts their optimal capital choices. Our quantified framework can explain the bulk of the gender heterogeneity in capital allocation across firms and a third of the disparities in entrepreneurial rates. Parallel to that, eliminating the gender difference in financial access has a sizeable positive effect on the allocation of entrepreneurial talent and capital, and leads to a 4% increase in total output. Finally, we explore the differential effect that fiscal policies targeting entrepreneurial activities can have on both male and female-led firms in the presence of gender imbalances in financial markets.
Winner of the Young Economist Award from the European Economic Association and UniCredit Foundation in 2021
WORKING PAPERS
Student Debt and Entrepreneurship in the US
Policy makers and researchers are actively debating over the consequences of student debt for individuals' choices and aggregate quantities in the US. Using micro-level data and focusing on entrepreneurial outcomes, I document that having a student loan is associated with a lower likelihood of opening a firm and obtaining funding, and is linked to lower business size and revenues. To rationalize my findings, I build a heterogeneous agents model with education and entrepreneurial decisions, where student debt slows down the accumulation of wealth and reduces the collateral entrepreneurs can pledge to rent capital on financial markets. Calibrated to US data, my framework matches between 30 and 80% of the gaps in entrepreneurial margins across agents with and without college, and with or without loans. I also show that the increase in university prices and student debt from the 1980s to today accounts for a third of the decline in the entrepreneurial rate of college graduates with loans. As a validation exercise, I exploit the exogenous variation in the amount of individuals' outstanding debt induced by the 1998 reform to student loans bankruptcy. A regression discontinuity design pins down the elasticity of entrepreneurial entry to student debt that is then replicated in the model. Finally, I use my framework as a quantitative laboratory to study the effects of policy reforms, such as adopting income-driven repayment plans, raising college borrowing limits and expanding grants.
Special Mention at the 9th Edition of Econ JM Best Paper Award from the European Economic Association and UniCredit Foundation
Labor and Family Dynamics in a Joint-Search Framework (joint with Danila Smirnov). R&R at JPE Macro
We develop a novel search theory of the labor and marriage markets that accounts for the interplay between employment and family dynamics. In our heterogeneous agents model, individuals search and lose jobs, accumulate and deplete productivity, and undergo a two-sided matching process to form couples, which increases the likelihood of realized fertility. By endogenizing household formation, we show that agents' sorting and selection into couples determine labor productivity differences across the samples of married and single individuals. In addition, sharing family income can insure households from productivity shocks and unemployment risk. Only when considered together, these mechanisms replicate the differences in labor market outcomes by marital status documented in the US, explaining 75% of the wage marital premium and 50% of the unemployment marital gap. Finally, we use the model as a laboratory to study optimal unemployment insurance schemes for single and joint-households.
Heterogeneous Markups Cyclicality and Monetary Policy (joint with Andrea Chiavari and Danila Smirnov). Submitted.
Firms' markups cyclicality is at the heart of monetary policy transmission in the New Keynesian model. Using US Compustat data and employing local projection techniques, we uncover a novel empirical fact: dominant firms have a more countercyclical markup response after an unexpected contractionary monetary policy shock. Using a heterogeneous firms New Keynesian model with demand accumulation and endogenous markups that evolve over the life-cycle of producers, we show that this is due to the different demand elasticities faced by the firms. Dominant firms face a more inelastic demand, which implies a lower pass-through rate from costs to prices. Therefore, after a contractionary monetary policy shock, dominant firms pass less the reduction in marginal costs to prices compared to competitors, and increase their markups by more, as documented empirically. After calibrating the model to US micro-level data, we find that considering these heterogeneous demand elasticities has important implications for monetary policy amplification.
Student Debt and Entrepreneurship in the US
Policy makers and researchers are actively debating over the consequences of student debt for individuals' choices and aggregate quantities in the US. Using micro-level data and focusing on entrepreneurial outcomes, I document that having a student loan is associated with a lower likelihood of opening a firm and obtaining funding, and is linked to lower business size and revenues. To rationalize my findings, I build a heterogeneous agents model with education and entrepreneurial decisions, where student debt slows down the accumulation of wealth and reduces the collateral entrepreneurs can pledge to rent capital on financial markets. Calibrated to US data, my framework matches between 30 and 80% of the gaps in entrepreneurial margins across agents with and without college, and with or without loans. I also show that the increase in university prices and student debt from the 1980s to today accounts for a third of the decline in the entrepreneurial rate of college graduates with loans. As a validation exercise, I exploit the exogenous variation in the amount of individuals' outstanding debt induced by the 1998 reform to student loans bankruptcy. A regression discontinuity design pins down the elasticity of entrepreneurial entry to student debt that is then replicated in the model. Finally, I use my framework as a quantitative laboratory to study the effects of policy reforms, such as adopting income-driven repayment plans, raising college borrowing limits and expanding grants.
Special Mention at the 9th Edition of Econ JM Best Paper Award from the European Economic Association and UniCredit Foundation
Labor and Family Dynamics in a Joint-Search Framework (joint with Danila Smirnov). R&R at JPE Macro
We develop a novel search theory of the labor and marriage markets that accounts for the interplay between employment and family dynamics. In our heterogeneous agents model, individuals search and lose jobs, accumulate and deplete productivity, and undergo a two-sided matching process to form couples, which increases the likelihood of realized fertility. By endogenizing household formation, we show that agents' sorting and selection into couples determine labor productivity differences across the samples of married and single individuals. In addition, sharing family income can insure households from productivity shocks and unemployment risk. Only when considered together, these mechanisms replicate the differences in labor market outcomes by marital status documented in the US, explaining 75% of the wage marital premium and 50% of the unemployment marital gap. Finally, we use the model as a laboratory to study optimal unemployment insurance schemes for single and joint-households.
Heterogeneous Markups Cyclicality and Monetary Policy (joint with Andrea Chiavari and Danila Smirnov). Submitted.
Firms' markups cyclicality is at the heart of monetary policy transmission in the New Keynesian model. Using US Compustat data and employing local projection techniques, we uncover a novel empirical fact: dominant firms have a more countercyclical markup response after an unexpected contractionary monetary policy shock. Using a heterogeneous firms New Keynesian model with demand accumulation and endogenous markups that evolve over the life-cycle of producers, we show that this is due to the different demand elasticities faced by the firms. Dominant firms face a more inelastic demand, which implies a lower pass-through rate from costs to prices. Therefore, after a contractionary monetary policy shock, dominant firms pass less the reduction in marginal costs to prices compared to competitors, and increase their markups by more, as documented empirically. After calibrating the model to US micro-level data, we find that considering these heterogeneous demand elasticities has important implications for monetary policy amplification.
WORK IN PROGRESS
- Monetary Policy in a Multi-market Economy: The Role of Demand and Adjustment Costs (with Danila Smirnov)
- Higher Education, Skill Mismatch and Technological Change (with Alejandro Rabano)
- Sorting of Entrepreneurial Teams (with Edoardo Acabbi, Andrea Alati and Luca Mazzone)
- Firm Organization and Financial Structure (with Stefano Pietrosanti)
- Gender Differences in Savings over the Life Cycle: The Role of Financial Literacy (with Marta Cota and Maria Frech)
